Table 5.1 1 year 2 years 3 years 1.07% 1.50% 1.71% 72- Table 5.1 shows the actual interest rates for Treasury securities of different maturities as issued on 02/11/2022. a) Refer to Table 5.1 On this day, what did investors expect the interest rate to be on a one-year Treasury bill in the second year based on expectations theory of the term structure? A) 1.285% B) 1.93% C) 1.375% D) 2.57% b) Refer to Table 5.1 On this day, what did investors expect the interest rate to be on a one-year Treasury bill in the third year based on expectations theory of the term structure? A) 1.43% B) 2.50% C) 1.50% D) 2.13% c) Refer to Table 5.1 On this day, what did investors expect the interest rate to be on a one-year Treasury bill in the second year based on the liquidity premium theory of the term structure if the term premium on a two-year Treasury is 0.25%? A) 1.93% B) 1.83% C) 1.33% D) 1.43%
Table 5.1 1 year 2 years 3 years 1.07% 1.50% 1.71% 72- Table 5.1 shows the actual interest rates for Treasury securities of different maturities as issued on 02/11/2022. a) Refer to Table 5.1 On this day, what did investors expect the interest rate to be on a one-year Treasury bill in the second year based on expectations theory of the term structure? A) 1.285% B) 1.93% C) 1.375% D) 2.57% b) Refer to Table 5.1 On this day, what did investors expect the interest rate to be on a one-year Treasury bill in the third year based on expectations theory of the term structure? A) 1.43% B) 2.50% C) 1.50% D) 2.13% c) Refer to Table 5.1 On this day, what did investors expect the interest rate to be on a one-year Treasury bill in the second year based on the liquidity premium theory of the term structure if the term premium on a two-year Treasury is 0.25%? A) 1.93% B) 1.83% C) 1.33% D) 1.43%
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
Problem 11PROB
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